Many British retailers are nervous about spending in the Christmas trading period. High street discounting is rife.

Howard Archer, the chief UK and European economist at IHS Global Insight, said yesterday: “We expect consumer confidence to have been pressurised once again in December from serious fears of renewed recession in the UK and associated mounting concerns over jobs.

“Concern over the problems in the eurozone and the potential impact on the UK is also likely to have weighed down on confidence. Meanwhile, consumers’ purchasing power is currently still being squeezed substantially by elevated inflation and muted wage growth.

“However, there may have been a modest boost to confidence coming from the perception that inflation is coming down, fuelled by evidence that a number of retailers have engaged in significant discounting and promotions to try and boost sales over the critical Christmas period.

“This may well have made consumers believe that it is a good time to make big-ticket purchases.”

Laura Ashley has coped better than most in this tough climate, posting a 28 per cent rise in first-half profit in September.

The company can trace its roots back to 1953, when Laura and Bernard Ashley started printing fabric on their kitchen table in London, following a Women’s Institute exhibition at the Victoria and Albert Museum on traditional handicrafts.

They opened a showroom in London in 1958, which showcased their collections. By the end of the 1980s, the company had 450 shops worldwide.